Finance



By Imee Charlee C. Delavin, Reporter


Security Bank interested in possible acquisitions




Posted on April 12, 2016


SECURITY BANK Corp. (Security Bank) is open to possible acquisitions this year, its chief executive said, in a bid to accelerate its expansion plans and further grow its retail banking business.

“When there’s opportunity, and at the right price... we’re going to look at it. We’re always interested,” Security Bank President and Chief Executive Officer Alfonso L. Salcedo, Jr., said in a recent interview when asked for the bank’s acquisition plans this year.

Security Bank is open to buying a universal, thrift, or rural bank, but the local lender does not want to “overpay” for any acquisition it will make, the official said.

“[We’re] open to any,” Mr. Salcedo said.

The country’s fifth largest private domestic universal bank in asset terms recently sealed a partnership deal with Bank of Tokyo-Mitsubishi UFJ Ltd., (BTMU), Japan’s largest bank, which increased the local lender’s shareholder capital to P90.2 billion pro-forma as of April 1 from P53.2 billion as of Dec. 31, 2015.

The local lender earlier said the additional capital from the equity investment of Japan’s biggest bank will help scale up Security Bank’s branch network at a “much faster pace” to more than 500 by 2020.

The bank currently has at least 263 branches nationwide.

For its organic growth plans this year, Security Bank is looking to open 20-30 branches both in restricted and provincial areas, Mr. Salcedo said, to further expand its footprint and broaden its clientele as it pushes to grow its retail business amid slowing trading gains.

The bank seeks to double its current market share in both loans and deposits to between 8% and 9% from the current 4% range, with its aggressive expansion plans.

BTMU sought a 20% equity investment in Security Bank in a deal valued at P36.943 billion, the largest so far by a foreign entity in a Philippine financial institution.

The partnership -- under which the local lender issued to BTMU 150,707,778 common shares and 200,000,000 preferred shares -- secured central bank approval last Feb. 24.

Mr. Salcedo earlier said that with the additional capital from the deal, the local lender is looking “at being at the top four, five banks in the industry sooner than later.” BTMU for its part had said it is ready to help Security Bank not just grow its size, but also in terms of technology transfer and growing its retail banking business, among other areas.

The lender wants to grow its consumer banking segment to boost its profits amid an industry-wide slump in trading gains.

Security Bank’s last acquisition was Premiere Development Bank in February 2012, which it later renamed as Security Bank Savings to further expand the latter’s distribution reach nationwide and serve the needs of the consumer finance, small- and mid-sized market segments.

In February last year, Security Bank bagged regulatory approval to integrate its subsidiary Security Bank Savings Corp. into the main firm to allow the listed bank to “focus on just one direction” and maximize its resources.

In late April 2015, Mr. Salcedo said acquisitions are in line with the lender’s target to expand its consumer banking business in the medium term to increase the segment’s revenue share to one-third of the bank’s total revenue.

“I think you really have to look at organic and inorganic. So when the opportunity presents itself, whether rural banks, thrift banks, and if there’s a good fit, and the right price, why not?” Mr. Salcedo said.

“You have to be opportunistic on the acquisition side, and you have to organically put up what is needed to grow on the consumer side,” he added.

Security Bank posted a net income of P7.7 billion in 2015, up 7% year on year.